x Abu Dhabi, UAEWednesday 26 July 2017

English Premier League clubs in spending warning

Record amount of money spent on wages according to the Deloitte Annual Review of Football Finance.

Chelsea striker Fernando Torres.
Chelsea striker Fernando Torres.

English Premier League clubs are spending a record amount of money on wages amid warnings that their level of expenditure is threatening to become unsustainable.

Salaries rose by £201 million (Dh1.146 billion) in the 2010/11 season as, for the first time, wages accounted for 70 per cent of the revenue the 20 Premier League clubs generated, according to the Deloitte Annual Review of Football Finance.

While clubs generated more money than ever before - a £241m rise taking the total to £2.27bn - 80 per cent of that additional income was spent on salaries with the increase driven by the top-six finishers, plus Aston Villa, who spent an extra £145m between them.

And Deloitte warned that keeping wages in check "continues to be football's greatest commercial challenge" and pay discipline is required "in order to deliver robust and sustainable businesses".

Chelsea had the highest wage bill, of £191m, as well as the largest debt, of £819m, even if it is classed as "soft debt" because it is owed to Roman Abramovich, the club owner, rather than banks or external investors.

Manchester City's wage bill, which rose by £41m to £174m, was greater than their entire turnover during a year when Roberto Mancini's side won the FA Cup but did not compete in the Champions League.

City also recorded the biggest loss in Premier League history, of £197m, while Manchester United, who were Premier League champions and Champions League finalists, generated an operating profit of over £100m for the first time.

Premier League clubs also spent more in the transfer market, led by City, with a net spend of £141m, followed by Chelsea, whose £91m net spend included the British record £50m fee paid for Fernando Torres, as their collective net spend rose to £769m.

However, while the 20 Premier League clubs owed a combined £2.4bn in debt and had pre-tax losses of £380m, Deloitte said the division's worldwide appeal has enabled it to prosper.

"Top clubs in English football have continued to show impressive revenue growth despite a difficult economic climate," said Dan Jones, a partner in Deloitte's Sports Business Group.

"Premier League clubs' revenues increased by 12 per cent in 2010/11, driven by broadcast revenue increasing by 13 per cent to £1.18bn in the first year of a new three-year broadcast cycle.

"This uplift was primarily due to an increase in overseas broadcast deal values, demonstrating once again the Premier League's unrivalled global popularity."

It has by far the greatest turnover of any division, almost £500m higher than Germany's Bundesliga, whose operating profits of £154m mean it remains Europe's most profitable league and whose average attendance of 42,100 is the highest.

The Premier League and the Bundesliga were the only two of Europe's top five leagues - also including Spain, Italy and France - to record operating profits.

The Premier League clubs also have cash reserves of £195m, but that was principally attributed to Arsenal and Manchester United.

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